What Clients Need to Know About Health Care Reform

Transcription

1 What Clients Need to Know About Health Care Reform A Toolkit for Insurance Brokers in the Small Group and Individual Markets

2 What s inside Health care reform increases the need for informed brokers..1 Why businesses and individuals choose Horizon BCBSNJ... 2 Introducing our new health plans New benefits. New costs Our members health care dollars pay for a lot of health care... 6 The number of FTE employees determines how your group clients are affected... 7 ACA tax credits and penalties The ACA requires essential health benefits, including comprehensive wellness and preventive services Introducing the Health Insurance Marketplace Count on Horizon BCBSNJ to provide the full range of health care programs More tools and resources Introducing our new health plans Finding the new small employer health insurance plan that s right for your clients Finding the new individual health insurance plan that s right for your clients When it comes to dental care and prevention, our plans give everyone something to smile about A timeline of health care reform milestones and requirements We help you comply with requirements How to determine your number of FTEs How the ACA may affect your business in 2015 Are you required to buy coverage?

3 Health care reform increases the need for informed brokers Clients seek direction in a new world of requirements, penalties and opportunities The complexity of employee health benefits has challenged employers and health plan sponsors for years. Those challenges were multiplied in 2010, when President Barack Obama signed the Affordable Care Act (ACA) into law. The ACA was designed in part to encourage employers and individuals to purchase health insurance. To support this, the ACA includes tax credits for individuals and small businesses and penalties for individuals who do not purchase health insurance. To help your clients take advantage of the assistance and avoid the penalties, you need to understand the new law s promises and pitfalls, as well as information about the new line of health plans being introduced by New Jersey s largest health insurer. Horizon Blue Cross Blue Shield of New Jersey s Health Care Reform Toolkit can help you guide your clients through the changing health care landscape. HorizonBlue.com 1

4 Why businesses and individuals choose Horizon BCBSNJ Horizon BCBSNJ has been serving generations of businesses and their employees for more than 80 years. With 3.7 million members, we understand the complexities of managing health care programs for individuals and groups of every size. Our dedicated staff is here to guide you through the various plans, programs and online services, so that you have the information to help your clients make the right decisions. Horizon BCBSNJ is also part of the national network of independent, community-based Blue Cross and Blue Shield Plans serving nearly 100 million people. Our network provides choice and quality Our broad network of doctors, hospitals, health care professionals and pharmacies provide convenient access to the right provider or service, in the right location. Our provider agreements help ensure high quality standards that can ultimately save on premiums and the cost of covered services. Introducing our new health plans Health care reform plans for small businesses and individuals Horizon BCBSNJ will offer new health insurance plans that meet the needs of individuals and businesses, while adopting the standards set by the new law. Our new plans combine the standard essential health benefits, preventive services and all ACA requirements with the features of a Horizon EPO (Exclusive Provider Organization) or Horizon Direct Access plan. Horizon Advance EPO Our Horizon Advance EPO plans provide access to a variety of doctors, specialists and hospitals. These plans provide integrated medical and 2 HorizonBlue.com

5 pharmacy benefits, including wellness and emergency care. Members must select a Primary Care Physician (PCP) to coordinate care and provide referrals to specialists who participate with the Horizon Advance EPO product. Horizon Advance EPO members can choose to maximize their benefits by using hospitals with the Preferred Tier 1 designation ( ). Members can access other hospitals in the Horizon Hospital Network but will have higher out-of-pocket costs. Horizon Advantage EPO and Horizon Advantage Direct Access With our Horizon Advantage EPO and Horizon Advantage Direct Access plans, members have access to all doctors, specialists and hospitals that participate in the Horizon Managed Care Network. These plans provide integrated medical and pharmacy benefits, including wellness and emergency care. Although members are not required to select a PCP, there are lower out-of-pocket costs when certain care is coordinated through a selected PCP. Horizon Advantage EPO Essentials Our Horizon Advantage EPO Essentials plan is available to individuals ages 30 years and younger or individuals who meet certain financial hardship conditions, as certified by the Health Insurance Marketplace. This high-deductible plan provides integrated medical and pharmacy benefits, including wellness and emergency care and financial security in the event of costly hospitalizations. Dental plans Pediatric oral services is an essential health benefit under the ACA. Horizon BCBSNJ can help your clients make oral health part of their overall health program. Preventive services are included in new benefit plans Prevention and early detection of disease are the best medicine for preserving health and reducing the overall cost of care. Under the ACA, an annual wellness visit and most preventive services are covered in full when delivered by a network provider. HorizonBlue.com 3

6 New benefits. New costs. The health care reform law broadens access to benefits, expands the benefits that are covered and creates new taxes to help pay for them and other new expenses related to the law s administration. The principal factors that drive health insurance costs include: Expanding access to insurance The primary goal of health care reform is to help the uninsured access health insurance. The insured population will expand to include: y The currently uninsured. y Those who were unable to obtain coverage due to pre-existing conditions. Expanding covered benefits Benefit plans in the individual and small group markets are required to include essential health benefits, which may be more than what an individual currently has or wants. This means that some plans that were sold in the past will no longer be sold. Some individuals and small groups will see rate changes to address the cost of providing care. New health insurance fees The ACA introduces new fees on health insurers and health plan sponsors to help pay for many aspects of the new law. These include the: y Annual health insurance industry fee. y Cadillac excise tax (tax for high-cost plans). y Marketplace exchange user fees. y Patient-Centered Outcomes Research Institute (comparative effectiveness) fee. y Risk Adjustment Program and fee. y Transitional Reinsurance Program assessment fee. 4 HorizonBlue.com

7 Our goal is to provide better benefits at lower cost Health care premiums are used to reimburse doctors, hospitals and other health care professionals for a member s care. While the ACA increases benefits, it does not address the cost of providing care. That s why Horizon BCBSNJ is collaborating with the health care community on new ways to improve the quality of care members receive and to lower the overall cost of care. We reward doctors who keep their patients healthy and manage chronic disease by advancing highly personalized, coordinated care with patient-centered programs, such as Patient-Centered Medical Homes, Accountable Care Organizations and Episode of Care Programs. We believe these new models of care delivery will result in healthier patients and less health care spending. HorizonBlue.com 5

8 Our members health care dollars pay for a lot of health care For years, Horizon BCBSNJ has worked to enhance care while reducing costs. The ACA shares this approach and requires health insurers to meet a federal Medical Loss Ratio (MLR). The MLR is a percentage of premium dollars that an insurance company must spend on medical services and activities to improve quality. The health care reform law requires health insurers to refund part of the premiums they receive, if they do not spend certain amounts on medical claims or activities to improve the quality of care. Below is the percentage of premium that must be spent on medical expenses based on market segment: Individuals 80% 80% 85% Groups with fewer than 50 employees Groups with more than 50 employees Based on 2012 year-end data, Horizon BCBSNJ spent 88 cents out of every premium dollar to pay its customers medical claims. Horizon BCBSNJ used the remaining 12 cents of each premium dollar to pay its operating expenses, which included 10 cents for administrative services and 2 cents for profit. Based on 2012 year-end data. What this means to your clients Each year, Horizon BCBSNJ must meet the MLR requirement. If it does not, it must send a rebate to its customers. 6 HorizonBlue.com

9 The number of FTE employees determines how your group clients are affected A business s number of full-time equivalent (FTE) employees determines if it faces a penalty for not offering affordable coverage or if it qualifies for tax credits. Businesses with more than 50 FTE employees must provide them with affordable health coverage beginning January 1, 2015 or face a penalty. Businesses with fewer than 25 full-time equivalents may qualify for a federal tax credit. So it is important to first determine how many FTEs a group has. Counting FTEs the new math The Affordable Care Act redefines a full-time equivalent employee as one who works an average of 30 hours a week or more or an average of 130 hours a month. However, part-time employees who work less than 30 hours a week may also be factored into a company s workforce, based on a total number of part-time hours worked in excess of 120 days a year. As a result, it is possible that a business that employs just under 50 FTE employees could move into the over-50 category if it employs a number of part-time workers whose total hours equate to additional FTE employees. Our tool is available to help your clients determine how many FTE employees they need to report, or you may advise them to consult on the issue with their tax accountant. Seasonal workers who are employed less than 120 days a year are not counted. HorizonBlue.com 7

10 ACA tax credits and penalties Businesses with 50 or more FTE employees Businesses with more than 50 FTE employees are required to provide health insurance to their FTEs beginning on January 1, 2015 or pay a tax penalty. The coverage must provide minimum essential coverage that is affordable. Business with fewer than 50 FTE employees Businesses with fewer than 50 FTE employees are not required to provide health insurance. Businesses with fewer than 25 FTE employees Businesses with fewer than 25 FTEs may qualify for a federal tax credit if they purchase health insurance for their employees on the Small Business Health Options Program (SHOP). Businesses that pay at least 50 percent of single coverage may be eligible for a tax credit. This credit is only available for health plans purchased through the SHOP. Tax credits toward the cost of health insurance premiums are available for small businesses on a sliding scale. Businesses with 25 or fewer FTEs, excluding owners and their family members, may qualify if their employees average annual wages are less than $50,000. This credit may reach 35 percent (25 percent for non-profits) of the cost of health benefits in 2013 and rises to 50 percent (35 percent for non-profits) in Businesses with 10 or fewer employees who earn less than $20,000 annually in 2014 are eligible for the full 50 percent tax credit (35 percent for non-profits). Credits are claimed when income taxes are filed with an IRS Form 8941 that includes FTE calculations for the credit. Early Retiree Reinsurance Program Employer-based plans that provide health insurance to retirees between ages 55 and 64 years may receive financial help via the Early Retiree Reinsurance Program, designed to lower the cost of premiums for all employees and reduce employer health costs. 8 HorizonBlue.com

11 Individuals The ACA requires most individuals to obtain a health plan. With a few exceptions, most people who remain uninsured in 2014 for longer than three months will pay a penalty when they file their tax return. Individual coverage is available through Horizon BCBSNJ as well as the Health Insurance Marketplace. Government assistance for individuals Under the ACA, individuals who purchase insurance on the Health Insurance Marketplace or Marketplace plans through Horizon BCBSNJ may be eligible for government assistance for health insurance premiums and cost sharing, depending on their income and family size. If their household income is less than 400 percent of the federal poverty level (FPL), which was $94,200 for a family of four in 2013, they qualify for assistance. Individuals who have coverage through an employer can get subsidized coverage through the Health Insurance Marketplace if their Employer Subsidized Insurance (ESI) premiums amount to more than 9.5 percent of their household income or if the ESI plan pays less than 60 percent of the cost of covered benefits. The ACA provides two forms of subsidies to help pay for health insurance: y An advanced premium tax credit is applied immediately and lowers the premium amount an individual or family must pay. y A cost-sharing reduction subsidy may lower out-of-pocket costs for doctor and hospital visits. Affordability thresholds for consumers based on income Income Up to 133% FPL Affordability thresholds* 2% of income % FPL 3-4% of income % FPL 4-6.3% of income % FPL % of income % FPL % of income % FPL 9.5% of income * Subsidies are also based on the premium for a benchmark plan (the second-lowest-cost silver plan available). An individual or family who wants a more expensive plan must pay the difference. HorizonBlue.com 9

12 The ACA requires essential health benefits, including comprehensive wellness and preventive services The health care reform law includes a broad expansion of required benefits, many of which are not included in the coverage many people currently choose to purchase. For policies sold or renewed for January 1, 2014 effective dates and later, individual and small employer health insurance policies must include essential health benefits that cover 10 categories of services: y Emergency services. y Hospitalization. y Laboratory services. y Maternity and newborn care. y Mental health and substance abuse disorder services, including behavioral health treatment. y Outpatient services. y Pediatric services, including oral and vision care. y Prescription drugs. y Preventive/wellness services and chronic disease management. y Rehabilitative and habilitative services and devices. This new requirement is intended to ensure that most Americans obtain broad and comprehensive health insurance coverage. 10 HorizonBlue.com

13 Introducing the Public Marketplace The ACA establishes public marketplaces for individuals and small businesses that wish to compare health plans and purchase health insurance. These can be accessed online, through a call center or through paper applications. The public marketplace for individual consumers, which opened on October 1, 2013 is called the Health Insurance Marketplace. The public marketplace for businesses with fewer than 50 employees, which is scheduled to open on November 1, 2013, is called the Small Business Health Options Program (SHOP). Horizon BCBSNJ offers plans on both the Health Insurance Marketplace and SHOP with effective dates of January 1, 2014 and later. Qualified health plans (QHPs) Only qualified health plans (QHPs) can be offered on the public marketplaces. A health plan may be certified as a QHP if the health plan meets the following certification requirements: y Ensures a sufficient choice of providers. y Includes essential community providers in their networks. y Complies with the essential health benefits package. y Is accredited on quality. y Implements a quality-improvement strategy. y Provides data on quality measures and other business practices. y Meets marketing requirements. y Uses a uniform enrollment form. y Presents plan information in a standard format. If your clients look at qualified health plans on and off the exchanges, they will find closely matched plan offerings priced similarly. This is because all new health plans offered in the Individual and Small Group markets must provide coverage for essential health benefits, and they must be priced within certain actuarial value ranges related to member cost sharing. You and your clients may access the public marketplaces directly once they are launched by the federal government. HorizonBlue.com 11

14 Count on Horizon BCBSNJ to provide the full range of health care programs In addition to our new health care reform plans, we offer a full range of employer services and programs to meet employee health benefits and financial goals. No one in New Jersey offers more than Horizon BCBSNJ. y Health insurance plans. y Vision coverage. y Dental plans. y Workers Compensation programs. y Flexible Spending Accounts (FSAs). Horizon BCBSNJ is part of the national network of independent, community-based Blue Cross and Blue Shield Plans, serving nearly 100 million people throughout the country. We leverage the strength and resources of our national programs to benefit our members right here at home, where we live and work as neighbors. This combination allows us to bring innovative, affordable health care coverage to benefit the individuals and businesses we are proud to serve. 12 HorizonBlue.com

15 Introducing our new health plans Health care reform plans for small businesses and individuals The Affordable Care Act (ACA) provides the opportunity to offer new health insurance plans that meet our members needs while also meeting the standards set by the reform law. Our new small group and individual plans combine the standard essential health benefits, preventive services and all ACA requirements with the features of a Horizon EPO (Exclusive Provider Organization) or Horizon Direct Access plan. Our plans are built on high-value provider networks and include coordination of care and chronic care management programs to help manage costs. Horizon Advance EPO Our Horizon Advance EPO plans provide access to an extensive network of doctors, specialists and hospitals. These plans provide integrated medical and pharmacy benefits, including wellness and emergency care. Members select a Primary Care Physician (PCP) to coordinate care and provide referrals to specialists who participate with the Horizon Advance EPO product. For emergency care, members may go to the nearest hospital. For non-emergency care, members also have access to all participating hospitals or can choose to maximize their benefits by using preferred hospitals. Horizon Advantage EPO and Horizon Advantage Direct Access With our Horizon Advantage EPO and Horizon Advantage Direct Access plans, members have access to all doctors, specialists and hospitals that participate in the Horizon Managed Care Network. These plans provide integrated medical and pharmacy benefits, including wellness and emergency care. Although members are not required to select a PCP, there are lower out-of-pocket costs when care is coordinated through a selected PCP. Horizon Advantage EPO Essentials Our Horizon Advantage EPO Essentials plan is available to individuals ages 30 years and younger and those who have certain financial hardships, as certified by the Health Insurance Marketplace. This high-deductible, catastrophic plan provides integrated medical and pharmacy benefits, including wellness and emergency care and financial security in the event of costly hospitalizations. Dental plans Pediatric oral services is an essential health benefit under the ACA. Horizon BCBSNJ can help your clients make oral health part of their overall health program. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913)

16 Finding the new small employer health insurance plan that s right for your clients Horizon Blue Cross Blue Shield of New Jersey s new health insurance plans meet your clients needs and include Affordable Care Act (ACA) essential health benefits and preventive services. Available for purchase directly from Horizon BCBSNJ at buy.horizonblue.com or on the Small Business Health Options Program (SHOP), Horizon BCBSNJ health plans are built on high-value provider networks and include coordination of care and chronic care management programs to help manage costs. The chart below shows how our existing small group health plans will be replaced by the new ACA-approved plans. These new plans are referred to as metallic plans because they are named after precious metals, such as platinum, gold, silver and bronze and reflect the richness of benefits offered. They are available for purchase on November 1, 2013, with effective coverage dates of January 1, 2014 and after. Existing plans Replaced by plans off SHOP Replaced by plans on SHOP Horizon Advantage Direct Access and Horizon Advantage PPO: y Horizon Advantage Direct Access 100/70 y Horizon Advantage Direct Access 100/90/70 y Horizon Advantage Direct Access 100/80/60 $20/$40 y Horizon Advantage Direct Access 100/80/60 $30/$50 y Horizon Advantage PPO 100/80/60 Horizon Advantage Direct Access Platinum 100/70 BlueCard Horizon Advantage Direct Access Gold 100/80/60 BlueCard N/A Horizon Advantage Direct Access Gold 100/80/60 BlueCard For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey

17 Existing plans Replaced by plans off SHOP Replaced by plans on SHOP Horizon Advantage EPO: y Horizon Advantage EPO 100 $25/$50 no BlueCard y Horizon Advantage EPO 100 $30/$50 with BlueCard y Horizon Advantage EPO 100 $20/$40 no BlueCard y Horizon Advantage EPO 100/80 $20/$40 no BlueCard y Horizon Advantage EPO 100/80 $30/$50 no BlueCard y Horizon Advantage EPO 100/70 $20/$40 with BlueCard y Horizon Advantage EPO 100/50 $30/$50 no Blue Card y Horizon HSA Compatible Direct Access 100/80/60 $20/$40 y Horizon HSA Compatible Direct Access 100/80/60 $30/$50 y Horizon MyWay HSA Direct Access 100/80/60 $20/$40 y Horizon MyWay HSA Direct Access 100/80/60 $30/$50 y HSA Horizon Advantage EPO 100 $30/$50 no Blue Card Horizon Advantage EPO Gold 100 $30/$50 BlueCard is an option Horizon Advantage EPO Gold 100 $20/$40 BlueCard is an option Horizon Advantage EPO Gold 100/80 BlueCard is an option Horizon Advantage EPO Silver 100/70 BlueCard is an option Horizon Advantage EPO Silver 100/70 BlueCard is an option Horizon Advantage EPO Silver 100/50 BlueCard is an option Consumer-Directed Health Plans: HSA Horizon Advantage Direct Access Silver 100/80/60 BlueCard HSA Horizon Advantage EPO Bronze 100 $30/$50 BlueCard is an option N/A Horizon Advantage EPO Gold 100 $20/$40 no BlueCard Horizon Advantage EPO Gold 100/80 no BlueCard Horizon Advantage EPO Silver 100/70 no BlueCard N/A N/A N/A HSA Horizon Advantage EPO Bronze 100 $30/$50 no BlueCard For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey Broker (1013)

18 Finding the new individual health insurance plan that s right for your clients Horizon Blue Cross Blue Shield of New Jersey s new health insurance plans meet your clients needs and include Affordable Care Act (ACA) essential health benefits and preventive services. Available for purchase directly from Horizon BCBSNJ at buy.horizonblue.com or on the Health Insurance Marketplace, Horizon BCBSNJ health plans are built on high-value provider networks and include coordination of care and chronic care management programs to help manage costs. The chart below shows how our existing individual health plans will be replaced by the new ACA-approved plans. These new plans are referred to as metallic plans because they are named after precious metals, such as gold, silver and bronze and reflect the richness of benefits offered. They are available for purchase on October 1, 2013, with effective coverage dates of January 1, 2014 and after. These existing individual health plans are replaced with this ACA-approved metallic health insurance plan y Individual EPO Basic and Essential Plus 30% C250/500 y Individual EPO Basic and Essential 30% C250/500 y Horizon Direct Access Plan A/50 70/50 MMRx y Horizon Direct Access Plan A/50 70/50 y IHC Horizon HMO Consumer C50/70 y IHC Horizon HMO Consumer C40 D % Horizon Advantage EPO Bronze plan For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey

19 These existing individual health plans are replaced with this ACA-approved metallic health insurance plan y CMM D500 80% TO 10K LFT Max 250,000 Corp Grp Trust y Traditional Plan A/50 D % Coinsurance (Odd Year) y Traditional Plan A/50 D % Coinsurance (Odd Year) y Traditional Plan A/50 D % Coinsurance y Traditional Plan A/50 D % Coinsurance y Traditional Plan B Coinsurance 60% D1000 y Traditional Plan B/60 D % Coinsurance (Odd Year) y Traditional Plan C 70% D1000 y Traditional Plan C 70/30 C$0 D1500 W/MSA y Traditional Plan C 70/30 C$0 D1500 W/O MSA y Traditional Plan C 70/30 C$0 D2250W/MSA y Traditional Plan C 70/30 C$0 D2250 W/O MSA y Traditional Plan C 70% D2500 (Even Year) y Traditional Plan D Coinsurance 80% D1000 y Traditional Plan D 80/20 C$0 D1500 W/MSA y Traditional Plan D 80/20 C$0 D1500 W/O MSA y Traditional Plan D 80/20 C$0 D2250 W/MSA y Traditional Plan D 80/20 C$0 D2250 W/O MSA y IHC Traditional Plan D 80% Coinsurance D2500 (Even Year) y MSA Plan C 70/30 C$0 D2100/4200 M4200/7650 (Odd Year) y MSA Plan C 70/30 C$0 D3150/6300 M4200/7650 (Odd Year) y MSA Plan D 80/20 C$0 D2100/4200 M4200/7650 (Odd Year) y MSA Plan D 80/20 C$0 D3150/6300 M4200/7650 (Odd Year) y Horizon Direct Access Plan C 80/70 MMRx y Horizon Direct Access Plan C 100/70 MMRx y Horizon Direct Access Plan C 80/70 y Horizon Direct Access Plan C 100/70 y Horizon HMO Consumer Prod C15 IPN Member y Horizon HMO Consumer Prod C30 CPY IPN Member y IHC Horizon HMO Consumer C30/50 Horizon Advantage EPO Silver plans For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (1013)

20 When it comes to dental care and prevention, our plans give everyone something to smile about Everyone likes a good smile and our dental plans are enough to make everyone smile because they satisfy a variety of needs and circumstances. When it comes to dental care for adults and children, our plans emphasize preventive care and come in a wide choice of coverage options. Our extensive dental network makes it easy for employees to maximize their reimbursement. Dental plans for adults Flexible designs and a range of cost-sharing options Horizon Dental Companion Plan y The Horizon Dental Companion Plan is available when it is purchased together with a Horizon Blue Cross Blue Shield of New Jersey medical plan. y The Horizon Dental Companion Plan covers frequently needed, eligible preventive and diagnostic services, such as exams, cleanings, X-rays, amalgam (silver) fillings and space maintainers, at 100 percent when received in network. There are out-of-network benefits for certain eligible dental services. In some cases, there are no out-of-network benefits at all. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform.

21 Horizon Dental Option Plans The Horizon Dental Option Plans offer the freedom to receive dental services from any dentist, while employees save money and maximize benefits by choosing dentists within our extensive, nationwide network of 136,000 dentists. y y y Discounts between 10 and 30 percent with in-network dentists. Preventive dental services cover 100 percent of allowed charges. Deductibles and coinsurance may apply to the out-of-network option. Horizon Dental Option Plans offer flexibility with three benefit levels. y Horizon Dental Option Plan 100/80/50 y Horizon Dental Option Plan 100/80/60 y Horizon Dental Option Plan 100/100/50 Horizon Dental PPO Access Plans The Horizon Dental PPO Access Plans are available for employers with 10 or more employees and cover 100 percent of the most common dental services. For other major or specialty services, employees pay a reduced Horizon Dental PPO Plan allowance. For out-of-network care, employees pay higher out-of-pocket costs for certain eligible dental services and may be asked to pay dentists at the time of service and then submit a claim for reimbursement. In some cases, there are no out-of-network benefits. y Horizon Dental PPO Access 1050 Plan. This option offers employees a reduced fee to participating dentists for major or specialty services, including root canals, crowns and bridges. y Horizon Dental PPO Access Plan. This option requires employees to pay for any fees above the Horizon Dental PPO Plan allowance for major or specialty services, including root canals, crowns and bridges. Employees also may be asked to pay at the time of service and submit a reimbursement claim. HorizonBlue.com

22 Horizon Dental PPO Plans Horizon Dental PPO Plans offer the lowest fees available to employees through our Horizon Dental PPO Network of dentists. Employees have a choice of visiting out-of-network dentists, and in turn paying extra costs. The plans offer: y y Discounts between 10 and 30 percent with in-network dentists. Preventive dental services covered 100% of allowed charges, with In-network dentists. Horizon Dental PPO Plans are offered with three benefit levels. y Horizon Dental PPO Plan 100/80/50 y Horizon Dental PPO Plan 100/80/60 y Horizon Dental PPO Plan 100/100/50 Dental plans for children under 19 Pediatric oral health plans emphasize prevention Pediatric dental benefits are an important part of overall health. Beginning in January 2014, all individual and small group health plans, including those offered outside the Small Business Health Options Program (SHOP), must provide pediatric oral health services as part of the required essential health benefits package. While medical plans have the option of providing a bundled benefit that includes pediatric dental coverage through the SHOP, dental benefits may continue to be offered in a plan separate from other health care benefits. HorizonBlue.com

23 Horizon Pediatric Dental Plans Available for children under 19 years of age, these pediatric plans emphasize routine screenings, risk assessment and early intervention. Employers may choose from two plans: Employers can choose a plan that offers in-network benefits only or one with both in- and out-of-network benefits. y Horizon Young Grins. This plan requires that dental services be obtained from an in-network provider. There is no reimbursement for out-of-network care. y Horizon Young Grins Plus. This plan offers a higher reimbursement level when an in-network dentist provides care. It also offers a lower-level out-of-network benefit when care is obtained from a non-participating provider. Horizon BCBSNJ adult and pediatric dental plans help employees make oral health part of their overall health program and give them something to smile about. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913) HorizonBlue.com

24 A timeline of health care reform milestones and requirements When What* How this may affect you Dependent coverage Medical loss ratio (MLR) rebates Patient-centered outcomes research tax Expanded women s preventive care services Summary of benefits & coverage (SBC) Flexible spending account (FSA) annual limit HIPAA certification Medicare tax on wages & unearned income Employee notice of exchange Public exchanges open The individual mandate begins Annual dollar limits, waiting periods & pre-existing conditions Insurance carrier industry tax New individual and small group health plans become effective Wellness incentives Employer mandate and reporting requirements Excise tax on high cost (aka Cadillac ) plans Dependent children up to age 26 years must be allowed to remain on their parents group health plan. If an employer receives an MLR rebate from its insurer, it must return a proportional share to each enrollee or use the rebate to enhance plan benefits. A federal tax of $1 per covered person is charged for plan years ending in 2012 to help fund the Patient-Centered Outcomes Research Institute. The fee must be paid by July 31, This fee increases to $2 per covered person for plan years ending in 2013 and in subsequent years is indexed to medical inflation. Beginning August 2012, expanded preventive services for women are covered with no cost-sharing. Beginning September 2012, employees must be provided with SBCs during the enrollment period. Beginning January 1, 2013, a $2,500 limit applies to employee health care FSA contributions. Employer group health plans must certify that the plan s data and information systems are in compliance with Department of Health and Human Services (HHS) rules for certain electronic transactions. Medicare tax on wages increases by.9%. This applies to those earning $200,000, if filing single, $250,000 if married filing jointly, and $125,000 if married filing separately. Employers must provide employees with information about the Health Insurance Marketplace beginning October 1, 2013, when the Marketplace opens and at the date of hire thereafter. The Health Insurance Marketplace for individuals, and the Small Business Health Options Program (SHOP) open, allowing individuals and small businesses to purchase health insurance and determine eligibility for tax credits and cost-sharing subsidies. Almost all U.S. citizens are required to have health insurance coverage or pay a minimum fine. This fine is the higher of $95 or 1% of income in 2014; $325 or 2% of income in 2015, $695 or 2.5% of income in 2016 and increases annually by the cost of living thereafter. All of the fines are per person per year. Families have a cap on the total fine of $2,250 and the fine amount for children is half of the adult fine. Individual and employer health plans may not impose annual dollar limits on essential health benefits, waiting periods of longer than 90 days, or pre-existing condition exclusions. A new tax is placed on fully insured plans to fund the subsidies provided by the insurance exchanges. Non-grandfathered, high-deductible plans are replaced with new health plans with essential health benefits, plan design limits, limits on out-of-pocket medical expenses and changes in the prior rating methodology. Permitted wellness incentives increase from 20% of cost of coverage to 30%. If the wellness program is established to promote tobacco use prevention or reduction, the incentive increases to 50%. Employers with 50 or more full-time employees or full-time equivalents must offer affordable health insurance that provides minimum value to employees and their children up to age 26 years or face penalties. In addition, they are required to report information to the IRS about the coverage and verify that it provides minimum value. Employers become subject to a 40% excise tax if their group health coverage exceeds certain thresholds. The anticipated cost limits for 2018 are $10,200 for individual coverage and $27,500 for family coverage. * The mandates are generally applicable to group health plans and health insurance. Not all requirements may uniformly apply. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913)

25 We help you comply with requirements January 2013: Limits on health FSA contributions take effect. October 2013: Employers must provide employees with information about the Health Insurance Marketplace, benefit plans and tax credits Enrollment: Employers must coordinate with Horizon BCBSNJ to distribute a Summary of Benefits and Coverage (SBC) to employees. January 2015: Large employers must provide coverage and minimum value reporting. January 2015: W-2 reporting requirement (on 2014 income) begins for groups with more than 250 full-time equivalent (FTE) employees. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform.

26 Pre-tax salary-reduction contribution takes effect in 2013 Beginning in January 2013, employee pre-tax salary-reduction contributions to a health Flexible Spending Account (FSA) must be limited to $2,500, indexed for cost-of-living adjustments beginning in The plan sponsor also has the option of placing an even lower limit on these programs. The $2,500 limit does not apply to employer contributions to the health FSA and it does not impact contributions under other employer-provided coverage. For example, employee salary reduction contributions to an FSA for dependent care assistance or adoption care assistance are not affected by the $2,500 health FSA limit. What you must do y Determine whether your clients health FSA programs place the prescribed limit on employee annual pre-tax FSA contributions. y Adjust the prescribed limit according to the cost-of-living index each year, beginning in Inform employees of health insurance marketplace, plan options and subsidies Beginning in the fall of 2013, employers must provide employees with written information about their health insurance, the Health Insurance Marketplace and that they may be eligible for premium tax credits. Existing employees must be notified no later than October 1, New hires must receive this written notice within 14 days of their start date. The notice must: y Inform employees about the Health Insurance Marketplace and the services it provides. y Explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer s plan does not meet certain requirements. HorizonBlue.com

27 y Inform employees that if they purchase coverage through the Marketplace, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes; and y Include contact information for the Marketplace and an explanation of appeal rights. The notice may be provided electronically if the requirements of the United States Department of Labor s (DOL s) electronic disclosure safe harbor are met. Otherwise, it must be sent by first-class mail. A model notice is available through the DOL s website, dol.gov. Employers may customize the model notice or develop their own, provided they meet the content requirements. What you must do y Obtain a model notice and tailor it for your company. y Schedule its distribution to employees prior to October 1, y Institute a Human Resources policy to ensure new hires are notified within 14 days of their start date. Provide employees with a Summary of Benefits and Coverage The Summary of Benefits and Coverage (SBC) is a document that provides information about health plan benefits and coverage. In accordance with Affordable Care Act requirements, Horizon BCBSNJ will provide an SBC to the plan sponsor for plan participants and beneficiaries. Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period. The SBC also must be provided to participants and beneficiaries who enroll at other times, such as new hires and special enrollees. What you must do y Determine the type of coverage for which an SBC must be provided. y Confirm with Horizon BCBSNJ when you will receive an SBC and coordinate who will send it to participants and beneficiaries in accordance with distribution rules. HorizonBlue.com

28 Provide employees with the value of their benefits on their W-2 forms Employers must report the value of the benefits on each employee s annual W-2 form beginning with the calendar year 2012 forms. This reporting requirement is already in place for most employers that issue more than 250 W-2 forms in a calendar year. Some employers are exempt from this requirement until the IRS issues further regulations. Exempt employers include employers filing fewer than 250 W-2 forms in the prior calendar year, multi-employer plans, HRA plans and self-insured plans not subject to COBRA rules. Provide coverage and minimum value reporting to the IRS Beginning with tax year 2015, large employers that provide minimum essential coverage are expected to be required to report information to the Internal Revenue Service (IRS) about the coverage offered to full-time employees. Similarly, information must be supplied whether the coverage provides minimum value. Applicable large employers with at least 50 full-time and full-time equivalent employees must annually file additional information on employer responsibilities beginning in The IRS is expected to release final rules on this process in the future. For more information, please contact your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913) HorizonBlue.com

29 How to determine your number of FTEs For purposes of testing employer mandate applicability only The Affordable Care Act (ACA) impacts businesses differently, based on their number of full time-equivalent employees (FTEs). The number of FTEs determines whether a business must provide health coverage in 2015 (for businesses with 50 or more employees) or comply with the W-2 reporting requirement (for businesses with 250 or more employees). STEP 1 Total full-time employees Calculate the number of full-time employees for each calendar month in the previous year, and then total for the year. January July February August March September April October May November June December Full-time employees The ACA defines a full-time employee as one who works an average of at least 30 hours per week. Note: Employees who work for 120 days or less during a calendar year do not count toward the full-time employee total. STEP 2 STEP 3 Total part-time employees Calculate the number of hours your part-time employees worked each month (not to exceed 120 hours per month per employee), and then total the number of hours for the year. January July February August March September April October Divide the total number of hours worked by part-time employees by 120 to calculate the full-time equivalent. X 120 = full-time equivalent May Add total full-time employees to total part-time employees. November June TOTAL December TOTAL TOTAL EMPLOYEES Part-time employees Part-time employees (those working less than 30 hours a week) count toward employer size. Note: You can use employee information from any six consecutive months in 2013 to determine your projected group size in An employer is not considered to exceed 50 full-time employees if the number of employees is a result of seasonal employees who work for 120 days or less during a calendar year. Seasonal employees Seasonal employees who work less than 120 days a year are not counted. STEP 4 TOTAL EMPLOYEES Divide the total by 12 and round down. TOTAL EQUIVALENT EMPLOYEES (Round down) This information is provided to serve as a conceptual guide to calculating your number of FTEs and is not an official document. To ensure certainty, employers are advised to consult their tax accountants for final determination of FTEs they employ. For more information, please contact your broker or your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913)

30 How the ACA may affect your business in 2015 Under the Affordable Care Act (ACA), large employers may face penalties in 2015 if they don't make affordable coverage available to employees. Use this chart to find out how your business may be affected. Start here Does the employer have at least 50 full-time equivalent employees? No Penalties do not apply to Small Employers. (See 1 below) Yes Does the employer group offer coverage to its full-time employees? No Did at least one employee receive a premium tax credit or cost-sharing subsidy on the Health Insurance Marketplace? Yes The employer must pay a penalty for not offering coverage. (See 2 below) Yes Does the insurance pay for at least 60% of covered health care expenses for a typical population? No Did at least one employee receive a premium tax credit or cost-sharing subsidy on the Health Insurance Marketplace? Yes The employer must pay a penalty for not offering affordable coverage. (See 3 below) Yes Do any employees have to pay more than 9.5% of household income for the employer coverage? Yes These employees can choose to buy coverage on the Health Insurance Marketplace and receive a premium tax credit. There is no penalty payment required of the employer, since it offers affordable coverage. No 1 If the employer group has 25 or fewer employees and average wages that don t exceed $50,000, it may be eligible for a health-insurance tax credit. 2 The penalty is $2,000 annually times the number of full-time employees, beginning with the 31st employee (the first 30 employees are excluded). 3 The penalty is $3,000 annually for each full-time employee receiving a tax credit, up to a maximum of $2,000 times the number of full-time employees, minus the first 30 employees. The penalty is increased each year by the growth in insurance premiums. For more information, please contact your broker or your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913)

31 Are you required to buy coverage? In 2014, the Affordable Care Act will require almost every American to have health insurance coverage. 1 Do any of the following apply? y You are a part of a religion opposed to acceptance of benefits from a health insurance policy. y You are an undocumented immigrant. y You are incarcerated. y You are a member of an American Indian tribe. y Your family income is below the threshold for filing a tax return ($10,000 for an individual, $20,000 for a family in 2013). y You have to pay more than 8 percent of your income for health insurance, after taking into account any employer contributions or tax credits. No Yes There is no penalty for being without health insurance. Were you insured for the whole year through a combination of any of the following sources? y Medicare. y Medicaid or the Children s Health Insurance Program (CHIP). y TRICARE (for service members, retirees and their families). y The veteran s health program. Yes y A plan offered by an employer. y Insurance bought on your own that meets the requirements of a Bronze-level metallic health plan, as established by the federal government. y A grandfathered health plan in existence before the health reform law was enacted. The requirement to have health insurance is satisfied and no penalty is assessed. No Penalties may apply The Affordable Care Act requires almost every American to have health insurance. If you do not comply, the individual mandate will extract a penalty on your annual income tax returns. The penalties per adult are the higher of: $95 or 1% of income $325 or 2% of income $695 or 2.5% of income Increased annually by the cost-of-living adjustment Americans affected by this requirement will be able to go without coverage for three months without being penalized. For more information, please contact your broker or your Horizon Blue Cross Blue Shield of New Jersey representative or visit us at HorizonBlue.com/reform. Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (0913)

32 Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon name, symbols and Making Healthcare Work are registered marks of Horizon Blue Cross Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey (1013)